A recent survey conducted by the Texas Coalition for Long Term Care Business (CLTCB) found that 61.4% of companies with nursing homes as customers have seen a decrease in purchasing from those nursing homes in the past year.
Why Is This Happening?
Nursing homes and other long term care facilities in Texas are currently suffering due to the fact that Texas has the 49th lowest reimbursement rate for Medicaid. The reimbursement rate represents the percentage of total cost that the state government is being compensated for program expenditures by the federal government.
Under the Affordable Care Act, Medicaid reimbursement rates were set to increase to at least 100% of Medicare reimbursement rates on January 1, 2013. However, the payments have been delayed for 5 months and the new rates have still not yet been effected.
Consequences of Low Reimbursement Rate
The status of the Medicaid reimbursement rate in Texas means fewer doctors are accepting patients paying with Medicaid. This isn’t because the doctors don’t want to treat them; rather, it is because the doctors and hospitals are actually losing money when they treat patients whose primary form of payment is Medicaid.
When reimbursement rates are low and medical facilities continue to experience a rise in costs, it is simply not feasible to continue business as usual. Operations must be changed to fit the high costs and low reimbursement rates. Usually, in order to avoid dramatically reducing quality of care, the first thing to be cut from the budget is staff.
Financial Woes Becoming A Reality
“A recent statewide survey indicated 72% of nursing homes have already had to reduce staff or freeze benefits,” according to Buddy Parker, a member of CLTCB and representative of First Choice Medical Supply in Garland, Texas.
If the Medicaid reimbursement rate remains low, Long Term Care living facilities in Texas will have to continue slashing costs in order to keep up with the rising prices.
Hilltop Haven, a non-profit nursing home just outside Dallas, Texas, was already forced to shut down in March, due to their inability to “find a sustainable financial model”. Ninety percent of Hilltop Haven’s residents were on Medicaid.
Your Best Option
If you are a Texan and you haven’t considered Long Term Care Insurance, now is the time. A government study estimates that 7 in 10 Americans over the age of 65 will need Long Term Care at some point.
Despite a common misconception, Medicare does NOT cover Long Term Care. In order to qualify for the government subsidized Long Term Care from Medicaid, you must exhaust all of your financial assets. As the recent news in Texas proves, Medicaid may not even be a reliable source of quality care anymore. More facilities are turning towards privately insured business models and cutting the number of Medicaid eligible patients they accept.
If you live in Texas and have questions about Long Term Care Insurance or are interested in a policy, visit the Texas Long-Term Care Partnership website here.